This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Facebook Fallout

The Disappointing Facebook IPO's Impact on Retail Investors

Melissa Lee inquired how the IPO will impact retail investors.

Retail fund flows continue to be moving toward the safe haven of bonds and away from stocks. In the latest period ending Wednesday, $10 billion was redeemed from domestic equity funds, and $12 billion flowed into bonds. This continues a steady, multiyear outflow out of stock funds that commenced way back in 2007.

The timing couldn't be worse as it relates to the retail investor.

At best, my expectation that the reallocation rally (selling bonds and buying stocks) will immediately commence in the summer months ahead must be scuttled. At worst, the Facebook IPO (and the recent market swoon) will add more strikes to the hearts of individual investors, keeping them away from stocks over the balance of the year. (Retail investors have already endured two large drawdowns in stocks since 2000, a lost decade of investment performance, a flash crash, stagnating incomes while the necessities of life increase in cost.)

Josh Brown, who deals with scores of individual investors in his capacity as a money manager, underscored my view that the Facebook IPO was another blow to the individual investor community.
At the time of publication, Kass and/or his funds had no positions in the stocks mentioned, although holdings can change at any time.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free

Markets

Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs